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Know how much space you are working with. This is particularly important regarding height: Many local regulations on turning a basement into a livable area require that the basement be at least 7 feet tall, sometimes higher. Always consult local building codes.
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Inspect Plumbing and Wiring
You will probably need to add plumbing and wiring to your basement, including a separate bathroom. Check on existing sytsems to see what expansions and upgrades need to be done. Remember, you'll need a permit for this work.
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Seal the Rim Joists
Uninsulated rim joists are huge energy losers. Now's the time to insulate and seal your rim joists. One option is to seal the rim joists with rigid insulation cut to fit. We recommend a minimum of 2-in.-thick extruded polystyrene, but check your local codes to see what's required. If you have a table saw, use it to cut strips equal to the depth of your joists. Then use a fine-tooth handsaw, utility knife or miter saw to cut the strips to length. Fill small gaps with caulk, and larger ones with expanding spray foam from a can.